“There are a lot of headwinds, especially the fact that central banks aren’t even halfway through their tightening cycle,” he said.
In Singapore, benchmark iron ore futures traded for July delivery rose 1.9% to US$113.05 after sharp falls on Monday. BHP Billiton gained 1.7%, Rio Tinto climbed 2.3% and Fortescue Metals 3.5% to $17.59.
On the other side of the ledger, Queensland-based coal miners have been hammered after the Palaszczuk state government added three more tiers of coal royalties to take a bigger share of the soaring coal price.
The three new tiers include a 20% royalty rate for prices above $175 per tonne; 30% for prices over $225 per ton and 40% for prices over $300 per ton.
In response, Bowen Coking Coal fell 47% to 22¢ per share, with coal mine operator Bowen Basin Coronado Coal down 9.3%.
In other corporate news, GrainCorp said its full-year 2022 EBITDA guidance of $590 million to $670 million represents a 90% increase over the prior year and reflects strong global demand. Australian grains, oilseeds and vegetable oils. Shares jumped 4.7% to $9.52 at the close.
Westpac said it would raise approximately $750 million in new top-tier capital through the issuance of capital note debt. Interest paid should be between 3.4% and 3.6% above the exchange rate for three-month bank bills. The capital notes can be converted, redeemed or transferred on certain dates in 2028 and 2029. Their conversion into common shares is scheduled for June 2031.
In New Zealand, the Westpac McDermott Miller Consumer Confidence Index fell 13 points in the June quarter to a record low of 78.7 as the Reserve Bank of New Zealand raised interest rates to 2% in May.
Mr. Sherwood said investors are worried about the impact of rising interest rates on consumer spending and the prospect of recessions in the United States and elsewhere.
“Last week the Fed upped the ante and hiked rates by 75 basis points, which they previously ruled out, so they’re more hawkish, they’re more worried about the inflation backdrop and expectations for inflation that are no longer entrenched,” he said.
“They are trying to chart a course that will see interest rates rise and unemployment rise. We know the Fed wants to raise rates to 3.8% by mid-2023, but the key question now is how far can it raise rates before something breaks, and she just has to stop. Obviously, the faster they walk, the sooner we get to that fork in the road. »
In bond markets, yields on benchmark 10-year US Treasuries climbed 4 basis points to 3.28%, with yields on Australian 10-year Treasuries holding steady at 4.07% at the close. .
Flagship cryptocurrency bitcoin continued its two-day rally to add 4.3% to US$20,960. The second-largest cryptocurrency Ethereum advanced 6.7% to US$1,153.
The Australian dollar closed flat that day at US69.6¢.